While America’s housing crisis is far from over, new data shows that U.S. homeowners are starting to climb out of the financial doldrums: the second quarter showed a 2.5 million decrease in the number of homes currently underwater.
According to CNN Money, which reported on a report released by CoreLogic, a rise in housing prices in the past several months has driven down the number of Americans who owe more on their homes than they’re worth. Some 2.5 million homes emerged from this “underwater” status between April and June, which represents a drop in the total percentage of upside down mortgages from 19.7% in March to 14.5% in June.
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This development is good news for realtors and economists who have been wringing their hands at the slow pace of the housing recovery since the onset of the Great Recession in 2008. The lackluster real estate market has been an integral piece of the U.S.’s overall sub par economic picture, so an up-tick in home values is seen as a promising sign for the coming months and years.
All this is not to say that the housing market has completely rebounded; several states still struggle with high numbers of underwater homeowners. Nevada has the highest percentage of such homes – currently, more than 36% of Nevada’s homeowners owe more on their homes than those houses are worth. Florida, Michigan, Arizona, and Georgia also have a large population of underwater homes. However, these states also saw the highest drop in home values during the recession, so as home prices rise in other parts of the country, the hope is that these states’ troubled housing markets are on the road to recover.
The rise in the value of real estate is good news for those who are currently homeowners, but the pressure is on for those who are looking to jump into the market. Many fear that if current trends in home prices continue, they might be priced out of their preferred neighborhoods.
Are you feeling confident about the recovery in the housing market?